Institutions and entrepreneurship in a non‐ergodic world

Abstract

Research Summary This special issue advances the global strategy and entrepreneurship fields by providing a better understanding of the linkage between institutions and entrepreneurship. We provide an overview of existing literature in three key research areas: (a) the impact of institutions (types and complexity) on entrepreneurship, (b) the effect of institutional evolution (overall evolution and interplay among institutions) on entrepreneurship, and (c) the coevolution of institutions and entrepreneurship. We introduce the eight articles appearing in this special issue, examine the relationship between institutions and entrepreneurship in a non‐ergodic world, and highlight meaningful and promising avenues for future research in each of the three key research areas in the domain of institutions and entrepreneurship. Managerial Summary This study clarifies the complex relationship between institutions (the rules and norms that govern economic transactions) and entrepreneurship. Our discussion of existing literature, special issue articles, institutions and entrepreneurship in a world of significant change, and several promising avenues for future research highlights to entrepreneurs and their stakeholders the critical role that institutions play in entrepreneurial strategies and actions in three ways. First, the types of institutions and their complexity in a location alter entrepreneurs' incentives and ability to create new ventures. Second, the continued changes in institutions ‐ some in favor of free‐market relationships and others restricting them ‐ alter entrepreneurs' behaviors. Third, the entrepreneurial spirit and the creation of new ventures can drive the transformation of institutions that govern future market transactions.

Emerging issues in corporate entrepreneurship: evidence from the United Arab Emirates

“…The emergent factor Assessed and Regulated Innovation influences middle managers’ behaviour by combining the organic free flow of information and idea-sharing with rigid thinking based on hierarchy and adherence to rules and regulations. Our case firms exhibited something of a paradox that despite innovation as conceptual bedrock for CE, there is a specific mix of policy instruments for the UAE emerging market where innovative ideas are evaluated and considered (Boone et al , 2019; Li et al , 2021). The definitions of entrepreneurship are often ambiguous in the literature, and our findings suggest that regional institutional differences exacerbate the problematic nature of CE.…”

“…Many UAE companies benefit from localisation requirements that add cultural context to innovation, making it applicable and usable in several countries (Forcadell et al , 2020). We argue that centrally controlled standardisation of innovation combined with local legal requirements and customers’ specifications is often accompanied by new organisational standards and rules that seek conformity in practices and behaviour (Evans et al , 2002; Li et al , 2021). However, in contrast to work autonomy and discretion, the emergent factor Communication and Trust plays a prominent role in UAE’s multinational firms regarding how open communication impacts decision-making freedom and work autonomy through trust-building.…”

“…However, there is minimal reference to the institutional logic in CE scholarship. Recently, Li et al (2021) have argued that the institutional order represents a unique configuration of institutions in different countries, and each institution type has a different weight and influence over the whole system (Campante and Yanagizawa-Drott, 2015). For example, the institutional analysis of Islamic entrepreneurship provides valuable insights into how religion denominates certain restrictions and specifies the ontology of business and its role in broader society (Farmaki et al , 2020; Gümüsay, 2020).…”

“…MNEs' values are framed according to individual merits, entrepreneurialism and willingness to self-improve (Kobal et al , 2018). This institutional logic highlights how different logics of state, market and society shape MNE's organisational culture (Li et al , 2021). There is little empirical research on CE development strategies in multinational organisations.…”

Institutions and macroeconomic indicators: entrepreneurial activities across the world

“…Moreover, there is broad scholarly consensus that institutions (Wales et al ., 2021; Pindado et al ., 2023; Medase et al ., 2023), macroeconomic indicators (Charfeddine and Zaouali, 2022) and the developmental stages of countries (De Mello et al ., 2022) act as guiding forces for entrepreneurial activities. Recent studies have emphasized the role of institutions (Bjørnskov and Foss, 2016; Li et al ., 2021; De Mello et al ., 2022) and macroeconomic indicators (Charfeddine and Zaouali, 2022) in shaping entrepreneurial activities in both developed and developing economies (Afawubo and Noglo, 2022; De Mello et al ., 2022; Stephen et al ., 2005; Escandon-Barbosa et al ., 2019; Guerrero et al ., 2021). Despite these insights, our understanding of the multilevel impacts of institutions and macroeconomic indicators on entrepreneurial activities remains incomplete.…”